NGPF - Types of Credit

Where do banks get the money to lend out to consumers?

• From their clients' savings accounts

• From government grants

• From international investments

• From selling stocks

How are credit cards and debit cards different?

• A credit card can offer perks such as purchase protection.

• A debit card allows you to borrow money up to a certain limit.

• A credit card requires a PIN for every transaction.

• A debit card can build your credit score.

How do federal student loans differ from private student loans?

• Fed loans have fewer and less flexible repayment options

• Fed loans generally have higher interest rates

• Private loan repayment may start while you're in school

• Private loans don't require a cosigner, fed loans do

How do you avoid paying interest on your credit card (or any other loan for that matter)?

• Always make the full payment on time

• Only pay the minimum amount due

• Use cash for all purchases

• Transfer your balance to another card

How do banks make money off of the credit they issue?

• They charge a high interest rate on the loan.

• They offer free loans to attract customers.

• They invest in stocks with the loaned money.

• They charge a flat fee for all loans.

Which is TRUE when you make only the minimum payment each month?

• You are charged interest on the remaining balance.

• You will never incur any fees.

• Your credit score will improve immediately.

• You will pay off your debt faster.

Which of the following is NOT a typical type of credit?

• Mortgage

• Overdraft

• Credit Card

• Pre-Paid Debit Card

True or False: Landlords are required to submit your payment history, which can boost your credit score.

• True

• False

• Only if requested by the tenant

• Only for certain types of leases

If the collateral for your secured loan can be taken away, why get a secured loan at all?

• Because they usually have a lower interest rate

• Because they are easier to obtain than unsecured loans

• Because they offer more flexible repayment terms

• Because they require no collateral at all

A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay.

• lower, more

• higher, less

• higher, more

• lower, less